At MoneyConf, An Unexpectedly Subdued Outlook for Blockchain

Over the din of 1,800 caffeinated entrepreneurs, financial incumbents and tech enthusiasts, MoneyConf 2017 showcased how cryptocurrencies and blockchain are steadily becoming an important part of the fintech scene.

One panel even went so far as to examine the question of how bitcoin will go mainstream, though responses were, perhaps, not as expected.

Jon Matonis, vice president of corporate strategy at nChain, said it already has – through gambling. He insists that this shouldn’t be a surprise, though. After all, he reminded the audience, when PayPal went public, over 70% of its initial business was related to adult entertainment and online gaming.

He did concede, however, that that we haven’t yet seen the scaling and the maturity that could make public blockchains ready for enterprise applications.

Holding patterns

His co-panelist Huy Nguyen Trieu, CEO of fintech consultancy The Disruptive Group, extended that argument to include private blockchains. He argued that while peak blockchain hype was last year, it will still be some time before we see blockchains in wide use in the financial industry.

Even once the technology is ready, he explained, internal processes need to be revamped, which can take years.

Nguyen Trieu went on to dismiss the disruption theory by pointing out that what is happening around blockchain in the financial sector is not disruptive at all.

He said:

“We’ve lost the disruptive part of blockchain at the institutional level. That is coming much more from bitcoin and cryptocurrencies.”

However, he argued that the potential was still there. Blockchain architecture, he explained, is inspiring new design processes – this, he believes, will be the biggest impact in finance.

Matonis pointed out that a new vector of innovation was digital tokens, which “totally transform investor rights”.

In another panel, Peter Smith – founder and CEO of bitcoin software startup Blockchain – agreed with that statement, stating that initial coin offerings (ICOs) were a “500 to 1000-times improvement” on how capital is raised.

Token sales also featured in an afternoon discussion between Matonis and Joseph Lubin, founder of ConsenSys, which highlighted how ethereum has escalated the speed at which ICOs are disrupting venture capital. Before, Lubin pointed out, developers would just fork the codebase, which has led to the current chaotic system of different-but-related blockchains.

Looking forward

Given that MoneyConf focuses on the financial applications of tomorrow, it’s not surprising that more interest was shown in the potential of digital tokens than in the bitcoin price increase. What was unexpected, however, was the relatively subdued outlook for blockchain’s impact on finance, as expressed by panel participants across the different sessions.

For instance, R3 CEO David Rutter ventured to predict that we will see digital ledger tech deployed this year, though mostly around end-of-day trade data. (While interesting, it’s not the financial revolution many were hoping for.)

Matonis, while expressing short-term optimism, cautioned that the growth in ICOs is not sustainable.

And Peter Smith took the middle road by positing that the future would reveal some radical blockchain-based innovation in financial services, but that the incumbents would still be around.

Perhaps the most optimistic vision of the day came from ConsenSys’ Lubin.

When asked if a consolidation in the distributed ledger sector was inevitable, he said:

“I anticipate that there will be many, many different blockchain systems.”